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Türkiye Lira Sinks to Record Low After Unconvincing Rate Hike 

People walk in front of Taksim Mosque that is mirrored in a window in Istanbul, Türkiye, 22 June 2023. (EPA)
People walk in front of Taksim Mosque that is mirrored in a window in Istanbul, Türkiye, 22 June 2023. (EPA)
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Türkiye Lira Sinks to Record Low After Unconvincing Rate Hike 

People walk in front of Taksim Mosque that is mirrored in a window in Istanbul, Türkiye, 22 June 2023. (EPA)
People walk in front of Taksim Mosque that is mirrored in a window in Istanbul, Türkiye, 22 June 2023. (EPA)

Türkiye’s lira weakened as much as 3.3% to a record low on Friday, extending losses a day after the central bank's large rate hike failed to assure markets that President Recep Tayyip Erdogan was abandoning his long-held unorthodox policies.

The lira touched a record low of 25.74 against the dollar at 1006 GMT, down some 27.3% this year, and was at 25.6480 at 1039 GMT.

The central bank raised its key rate by a hefty 650 basis points to 15% on Thursday, falling well short of expectations of a larger initial tightening that analysts said would have underlined a longer-term commitment to battle inflation.

"The transition appears to be more gradual than we had thought," Goldman Sachs said in a note.

The central bank said it would go further "in a timely and gradual manner" after its first meeting under new Governor Hafize Gaye Erkan, whom Erdogan appointed after his election victory last month.

New Finance Minister Mehmet Simsek, who is highly regarded by financial markets reinforced the U-turn message saying, "the path towards price stability is going to be gradual but steadfast."

The move marked a change in course after years of monetary easing in which the one-week repo rate had been cut to 8.5% from 19% in 2021 despite soaring inflation.

In a Reuters poll, the median estimate was for a hike to 21%. Analysts said the smaller move suggested Erkan might have limited room to aggressively tackle inflation under Erdogan, who has eroded the bank's independence in recent years.

Reflecting the disappointment in the markets, the lira has declined some 8.5% since Thursday's hike.

Forward swap markets were pricing it at 33 to the dollar in a year's time compared to around 30 that was priced in before the rate hike.

Goldman said the monetary tightening suggests the bank plans to stick with macro prudential measures "at least for now", adding that "it will be difficult to fully float the (lira) without having an interest rate anchor."

The central bank will likely eventually lift rates to a level "consistent with the pricing in the deposit market," the Wall Street bank added.

Inflation easing

After touching a 24-year high above 85% last year due to the rate cuts urged by Erdogan, inflation dropped to just below 40% in May. Real rates are deeply negative and the central bank's key rate also falls short of deposit rates that reach up to 40%.

A senior Turkish official said a larger hike could have caused trouble for the banking sector, and gradual steps prevent sudden volatility. "Moving ahead according the balance between inflation and interest rates with an eye on real rates is among the priorities now," the person told Reuters.

Türkiye’s international bonds stabilized with the longer-dated issues seeing small gains following sharp declines on Thursday in the wake of the rate decision, Tradeweb data showed.

However, the cost of insuring exposure to the country's debt through credit default swaps rose for a second straight session to stand at 518 bps, having added nearly 50 bps since last Friday's close, data from S&P Global Market Intelligence showed.

Erkan will meet with a group of bank executives on Friday, a banking source told Reuters, after Simsek met with them last week and discussed the problems in the sector.

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Business

Business-Friendly Climate Draws 123,000 New Commercial Registrations in Saudi Arabia

 Employees at the Saudi Business Center (SPA). 
 Employees at the Saudi Business Center (SPA). 
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Business-Friendly Climate Draws 123,000 New Commercial Registrations in Saudi Arabia

 Employees at the Saudi Business Center (SPA). 
 Employees at the Saudi Business Center (SPA). 

Saudi Arabia’s business environment attracted 123,000 new commercial registrations in the fourth quarter of 2025, pushing the total number of active registrations past 1.8 million by year-end. Foreign investment in the healthcare sector surged by nearly 560 percent over the past three years, highlighting strong international confidence in the Saudi market.

According to a recent report by the Ministry of Commerce, reviewed by Asharq Al-Awsat, the number of active sole proprietorship registrations reached 1.26 million by the end of 2025, reflecting 20 percent growth over the past five years.

Active limited liability companies (LLCs) totaled 571,000, with a sharp 183 percent increase over five years. Meanwhile, the number of joint-stock companies grew 50 percent over the same period to 4,733 active registrations.

Regional and Sectoral Performance

Riyadh led the Kingdom in new commercial registrations during the final quarter of 2025 with 45,600 records, followed by the Eastern Province with more than 20,000, and Makkah Region with 19,200.

The construction sector topped all industries, with more than 66,000 registrations issued during the quarter. It was followed by wholesale and retail trade with 24,900, and manufacturing industries with 23,700, while the remainder was spread across other activities.

The report also highlighted a strong rise in e-commerce sales conducted via Mada cards in October, which hit a record SAR 30.7 billion ($8.1 billion) - a 68 percent year-on-year increase, up SAR 12.4 billion ($3.3 billion) from October 2024, according to data from the Saudi Central Bank (SAMA).

Healthcare Sector Momentum

The Ministry of Commerce said Saudi Arabia continues to roll out development projects aimed at improving healthcare quality and capacity by strengthening national talent, adopting innovative digital solutions, and upgrading medical facilities.

The Kingdom ranks first regionally in healthcare investment, with agreements signed at the recent Global Health Exhibition in Riyadh valued at about SAR 133 billion ($35.4 billion). Foreign investment in the sector has expanded by more than 560 percent in three years, with healthcare contributing 5 percent of GDP.

Healthcare-related activities saw strong growth in the fourth quarter, including medical laboratories (+33%), pharmaceutical manufacturing (+31%), physiotherapy centers (+31%), and telemedicine and remote care services (+30%).

E-Commerce and High-Growth Sectors

Active e-commerce registrations rose 9 percent year-on-year to 43,800 by the end of the fourth quarter, up from 40,000 in the same period of 2024. Strengthening the e-commerce ecosystem is a key objective of the National Transformation Program, with Saudi Arabia ranked among the world’s top 10 fastest-growing e-commerce markets.

Promising sectors highlighted by the report include artificial intelligence, gaming, cybersecurity, health software, and electric vehicle charging stations. AI-related registrations grew 34 percent to more than 19,000, while gaming rose 27 percent to 841 registrations. UI/UX design activities climbed 28 percent to 18,900.

Cybersecurity registrations increased 27 percent to 9,700, while health and medical software surged 85 percent to 4,300. Power generation and distribution activities grew 27 percent, and EV charging station operations expanded 26 percent to 4,300 registrations.

Investment Deals and Forums

The report cited the success of the Biban Forum, recently held in Riyadh, which generated agreements and launches exceeding SAR 38 billion ($10.1 billion). Investment deals worth SAR 22.2 million ($5.9 million) benefited 55 startups, with participation from 1,021 companies across 66 countries.

It also highlighted the Northern Borders Forum, which offered more than 240 investment opportunities valued at SAR 40 billion ($10.6 billion) across sectors including livestock, food, mining and energy, tourism, environment, and logistics.

 

 

Business

SABIC Reshapes Global Footprint With $950m Divestment Deals

A SABIC employee (company website) 
A SABIC employee (company website) 
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SABIC Reshapes Global Footprint With $950m Divestment Deals

A SABIC employee (company website) 
A SABIC employee (company website) 

Saudi Basic Industries Corporation (SABIC) has announced a major overhaul of its global portfolio, accelerating its exit from petrochemical and engineering plastics assets in Europe and the Americas through two divestment deals worth a combined $950 million.

The move marks a fundamental shift in the company’s operating model and investment identity. It comes as part of an intensive portfolio-optimization program launched in 2022, aimed at boosting returns on capital, freeing up cash, and refocusing investments on higher-growth markets and more sustainable profit margins.

Following the announcement, SABIC shares came under heavy selling pressure on Thursday, falling to 48.78 riyals — their lowest level since April 2009. The decline reflected investor reaction to deal details that include non-cash losses of about $4.88 billion (18.3 billion riyals), stemming from the fair-value revaluation of divested assets. These charges are expected to weigh on the company’s fourth-quarter 2025 results.

While the market response was cautious, analysts say the accounting hit represents a necessary short-term sacrifice to build a leaner, more competitive company aligned with the new centers of global economic growth in East Asia. The divestments also fit within SABIC’s longer-term strategic shift that began in 2020, when Saudi Aramco acquired a 70% stake in the company from the Public Investment Fund for $69.1 billion in the largest deal in the history of the Saudi stock market.

Focus on Higher-Margin Markets

According to SABIC, the first transaction involves the sale of its European petrochemicals business to investment firm AEQUITA for an enterprise value of $500 million. The second covers the sale of its thermoplastics engineering plastics business in Europe and the Americas to Mutares SE & Co. KGaA for $450 million, with potential additional payments linked to future free cash flow over the next four years or a subsequent resale of the business.

SABIC said the transactions represent a key step in reshaping its portfolio, sharpening its focus on higher-margin markets and products with strong competitive advantages, while redeploying capital into opportunities that deliver stronger returns and improved free cash flow. The company stressed that the divestments will not detract from its commitment to technology and innovation or its ability to serve customers worldwide.

Short-Term Pain, Long-Term Gain

SABIC chairman Khalid Al-Dabbagh described the deals as a “transformational step” in the company’s strategy to maximize shareholder value by strengthening cash generation.

Chief executive Abdulrahman Al-Fageeh said the transactions extend the portfolio-optimization program launched in 2022, which included earlier exits from functional forms and the Hadeed and Alba businesses. He said the strategy allows SABIC to reshape its portfolio more effectively and concentrate on areas where it has clear and sustainable competitive advantages in a rapidly changing global environment.

For his part, Chief financial officer Salah Al-Hareky added that the divestments reflect SABIC’s disciplined approach to capital management. Freeing up capital for redeployment into higher-return opportunities, he said, will improve capital efficiency and enhance returns over the medium to long term.

Assets Involved

The European petrochemicals business being sold includes the production and marketing of ethylene, propylene, polyethylene, polypropylene and value-added polymer compounds, with manufacturing sites in the UK, the Netherlands, Germany and Belgium.

The engineering thermoplastics deal covers SABIC assets producing materials such as polycarbonate, polybutylene terephthalate and ABS resins, with manufacturing facilities in the United States, Mexico, Brazil, Spain and the Netherlands. Mutares co-founder and chief executive Robin Laik said the priority after completion will be ensuring business continuity and supporting employees during the transition, while unlocking the full potential of the assets as a standalone platform.

Completion of both transactions remains subject to customary conditions and regulatory approvals, including employee consultations where required. SABIC expects the deals to close in the second half of 2026.

Analysts see the exits from lower-return assets as a catalyst for improved margins and stronger free cash flow, positioning SABIC for a more resilient and profitable phase beyond the near-term pressures on its share price.

 

 

 

Business

Lebanon Signs Gas Exploration Deal with International Consortium Amid Economic Crisis

In this photo released by the Lebanese Government press office, Lebanese Prime Minister Nawaf Salam, right background, attends the signing of an international consortium deal for gas exploration in the cost of southern Lebanon between the Lebanese government and representing officials from the international consortium consisting of France's Total, Italy's ENI, and state-owned oil and gas company Qatar Energy, in Beirut, Lebanon, Friday, Jan. 9, 2026. (Lebanese Government press office via AP)
In this photo released by the Lebanese Government press office, Lebanese Prime Minister Nawaf Salam, right background, attends the signing of an international consortium deal for gas exploration in the cost of southern Lebanon between the Lebanese government and representing officials from the international consortium consisting of France's Total, Italy's ENI, and state-owned oil and gas company Qatar Energy, in Beirut, Lebanon, Friday, Jan. 9, 2026. (Lebanese Government press office via AP)
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Lebanon Signs Gas Exploration Deal with International Consortium Amid Economic Crisis

In this photo released by the Lebanese Government press office, Lebanese Prime Minister Nawaf Salam, right background, attends the signing of an international consortium deal for gas exploration in the cost of southern Lebanon between the Lebanese government and representing officials from the international consortium consisting of France's Total, Italy's ENI, and state-owned oil and gas company Qatar Energy, in Beirut, Lebanon, Friday, Jan. 9, 2026. (Lebanese Government press office via AP)
In this photo released by the Lebanese Government press office, Lebanese Prime Minister Nawaf Salam, right background, attends the signing of an international consortium deal for gas exploration in the cost of southern Lebanon between the Lebanese government and representing officials from the international consortium consisting of France's Total, Italy's ENI, and state-owned oil and gas company Qatar Energy, in Beirut, Lebanon, Friday, Jan. 9, 2026. (Lebanese Government press office via AP)

Lebanon ’s government on Friday signed a deal with an international consortium to explore gas in an offshore area bordering Israel. 

The deal for exploration at the so-called Block 8 off the coast of southern Lebanon comes after Lebanon and Israel signed a 2022 agreement over their maritime border. The new deal is the latest to be granted by Lebanon to international companies to search for gas in its territorial waters. 

Cash-strapped Lebanon hopes that future gas discoveries will help the country pull itself out of the worst economic and financial crisis in its modern history. 

The deal was signed at the government’s headquarters in downtown Beirut by Energy Minister Joe Saddi from the Lebanese side and officials from the international consortium consisting of France’s TotalEnergies, Italy’s ENI, and state-owned oil and gas company Qatar Energy. 

TotalEnergies said in a statement that the consortium plans to start with a 1,200-square kilometer (463 square mile) 3D seismic survey to assess the area’s exploration potential. 

In 2017, Lebanon approved licenses for France’s TotalEnergies, Italy’s ENI and Russia’s Novatek to move forward with offshore oil and gas development for two of 10 blocks in the Mediterranean Sea, including one that was at the time in a disputed part with neighboring Israel. 

The companies did not find viable amounts of oil and gas in one of the blocks north of Beirut, and drilling in another in the south was repeatedly postponed because of the maritime border dispute with Israel. Lebanon and Israel later signed a deal over their maritime border in 2022. 

In August 2023, an offshore drilling rig began operations in the Mediterranean Sea off Lebanon’s coast. 

That did not give positive results, but Patrick Pouyanné, Chairman and CEO of TotalEnergies, said in a statement that they will keep trying in other areas. 

“We remain committed to pursue our exploration activities in Lebanon,” said Pouyanné. “We will now focus our efforts on Block 8, together with our partners Eni and QatarEnergy and in close cooperation with Lebanese authorities.” 

On Oct. 8, 2023 Lebanon’s Hezbollah started firing rockets toward Israeli posts along the border to back its Hamas allies a day after the Palestinian group attacked southern Israel. The war lasted 14 months during which Hezbollah was severely weakened. 

In January 2023, Lebanon, ENI, TotalEnergies and state-owned oil and gas company Qatar Energy signed an agreement in which the Qatari firm replaced Novatek. Under the deal, Qatar Energy takes Novatek’s 20% stake in addition to 5% each from ENI and TotalEnergies, leaving the Arab company with a total stake of 30%. TotalEnergies and ENI will each have 35% stakes.